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GameTech Reports Revenues Up, Income Down

The revenue increase was largely the result of the growth in the installed base of the Company's color portable handheld unit, the TED2C(TM), and the Company's acquisition of certain assets of International Gaming Systems, LLC ("IGS") which was completed in the first month of fiscal 2003. The TED2C(TM) was the driver of revenue improvement in all of the Company's domestic regions and a significant contributor to increased international revenue. The acquisition of the IGS assets strengthened revenues from the Company's northeast and southern regions.

Gross profit improved by over $1 million over the same period in the prior year, but increases in research and development costs, general and administrative expenses, and sales and marketing expenses led to reduced net income for the quarter. The Company's revenue and gross profit improvements supported increased investment in research and development of $577,000 compared to the first quarter of fiscal 2002. Additionally, two primary factors led to a $906,000 increase in general and administrative expenses over the same period of last year. Legal expenses were higher than in the prior period, related in part to litigation with the Company's former distributor in Texas. The other significant factor leading to the current quarter's increase in general and administrative expenses was the result of a benefit in the first quarter of fiscal 2002 from reductions in the prior period's reserves for bad debts and management incentive compensation. Sales and marketing expenses also increased by $190,000 as a result of higher distributor commissions, but remained in line with the increase in revenues.

"We are very pleased with the revenue increases we have experienced during the first quarter," said Clarence Thiesen, Chief Executive Officer. "In order to continue our growth, we have made a concerted commitment to research and development of new products and systems, an effort that will endure throughout this fiscal year. Our R&D engineering team has more than tripled in size over the past year, and we look forward to continuing the rejuvenation of our products and the development of new and complementary products and systems that will positively impact play and revenues for our customers and the Company. Further, we have invested heavily in our security systems, which we believe will prove to be the most robust in the industry."

The Company's working capital and liquidity remain strong, despite the acquisition, for cash, of the IGS assets in November 2002 and the substantial investment in bingo units during fiscal 2002. At January 31, 2003, the Company had approximately $6.3 million in cash and marketable securities, and a current asset for refundable income taxes of approximately $3.6 million.

GameTech International, Inc. is a leading supplier of a comprehensive line of electronic bingo equipment, including hand-held bingo units, fixed-base units and turnkey accounting and management software. The Company supports its bingo operator customers with products it believes increase play, revenues and profits, and software customized to enhance management and operations, all backed by unparalleled customer service and support.

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